Marketers warn of job losses, supply disruption as depot prices soar to N870/litre; Dangote insists move will slash logistics costs and benefit Nigerians
The Dangote Petroleum Refinery’s plan to distribute refined products directly to end-users has triggered fierce opposition from major oil marketers and distributors, who warn that the move could destabilize Nigeria’s fuel supply chain, lead to long-term scarcity, and render thousands jobless.
On Thursday, the Natural Oil and Gas Suppliers Association of Nigeria (NOGASA) called on the Dangote Group to halt its direct distribution initiative and enter into dialogue with existing stakeholders. NOGASA's President, Bennett Korie, speaking during the association's Annual General Meeting in Abuja, warned that bypassing depots and marketers could collapse the established distribution structure and repeat the mistakes that rendered the Nigerian National Petroleum Company Limited (NNPCL) refineries ineffective.
Amid the ongoing feud, the price of petrol at private depots surged by 7%, rising from N815 to N870 per litre within 24 hours. Findings revealed that six major depots, including NIPCO, Aiteo, Rainoil, MenJ, Sahara, and Aipec, adjusted their prices, while Dangote’s terminal sold at N865. Compounding the tension, Dangote Refinery issued an internal memo suspending further PMS allocations, instructing marketers to hold off payments pending further updates.
The refinery’s decision to deploy 4,000 Compressed Natural Gas-powered trucks for direct nationwide fuel supply starting August 15 has been lauded by some as a cost-saving innovation. The refinery estimates the strategy will save over N1.7 trillion annually by removing logistics costs and lifting about 42 million MSMEs through lower energy prices. However, marketers argue the move amounts to an emerging monopoly that could edge out independent operators.
Billy Gillis-Harry, President of the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN), supported NOGASA’s stance, warning that the move could have long-term repercussions for the industry. He likened the scenario to the cement market, where monopoly practices led to price hikes and limited consumer choice. According to Gillis-Harry, retail operators are already losing as much as N80 per litre, and continued pricing instability could force closures and job losses across the sector.
He also raised alarm that Dangote’s control of refining, logistics, retail, and pricing could blur the lines between business and regulation. “One company refining, stocking, transporting, and fixing prices cannot be healthy for a deregulated market,” he stated, calling for urgent regulatory oversight and intervention by the Nigerian Midstream and Downstream Petroleum Regulatory Authority.
Reacting to the growing criticisms, a senior Dangote Group official dismissed the concerns as “anti-Nigeria,” insisting the plan is aimed at helping consumers by eliminating logistics costs, not monopolizing the market. The official argued that the refinery’s 4,000-truck fleet alone is insufficient to dominate nationwide supply across Nigeria’s 774 local government areas and that the market remains large enough for all players to operate.
“We’re not asking for money. We’re simply removing the cost of logistics, so Nigerians can pay less. Why is that a problem?” the official asked, accusing detractors of acting against national interest.
Independent Petroleum Marketers Association of Nigeria (IPMAN) Vice Chairman, Hammed Fashola, said while he could not confirm NOGASA’s ability to disrupt supply, he acknowledged the concern among stakeholders, particularly those fearing displacement from the new distribution model. He expressed hope that dialogue would eventually resolve the rift.
NOGASA's Korie reiterated that while the association strongly supports the Dangote Refinery, it opposes any model that centralizes refining, distribution, and retail under one entity. He urged President Bola Tinubu to mediate and ensure the refinery limits its role to production and wholesaling, allowing marketers to manage the rest of the supply chain.
According to him, over 50,000 filling stations and logistics companies could be affected if Dangote proceeds without considering existing players. He warned that focusing on direct retail could overextend the refinery’s operations, leaving it vulnerable to the same pitfalls that beset NNPCL.
“Concentrate on blending and refining. Sell to marketers, and let them handle the distribution,” Korie advised. “We are ready to work with the refinery, but this giant’s move to control distribution threatens our survival and that of thousands of employees.”
As competition intensifies with Dangote temporarily halting sales and importers slashing prices, all
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